In this article we have put together a list of the 10 steps involved in the mortgage process for First-Time Buyers in Manchester, so that you can be as prepared as possible ahead of your very own mortgage journey.
There are 10 steps to the process of home buying and obtaining a mortgage. These are as follows;
You’ve decided to take the big leap and purchase a home, taking out a mortgage as a First-Time Buyer in Manchester. Without a doubt, this is going to be one of the biggest financial decisions you ever make in your life. Upon this realisation it can be a little jarring, especially when you have no experience in this area at all.
Here is where a dedicated mortgage broker in Manchester can jump in and help you along the process. The goal of our team is to take the stress away from you, working hard to ensure you come out the other side with a mortgage and your first home, happy and deal that works in your favour.
Once you Get in Touch with us, we’ll book you in for a free initial mortgage consultation with one of our very experienced and trusted mortgage advisors in Manchester. At this point, we’ll take your details and look at what you’re planning to do, before starting off your mortgage process.
Something your advisor will be able to run through in your free mortgage consultation, is a Mortgage Affordability Assessment. This is a quick process where your dedicated mortgage advisor will run through your monthly income and regular expenditures (looking at what you spend your money on), to determine whether or not you have the financial means to afford the monthly repayments of the mortgage amount you’re looking to borrow from a lender.
It is very important for us to do this before putting you forward with a lender, as we need to be confident that you can definitely afford your repayments. This helps to avoid the risk of arrears and any future repossessions that could occur, something the lender will really want to try and avoid themselves if it can be helped.
A Mortgage Affordability Assessment will also usually be undertaken by a lender, so the initial checks we undertake will help save the time of the lender, ourselves and more importantly you, from an application that may be declined later down the line if you fail on affordability.
Following on from this, the next step in your consultation will be to obtain you a document called a Mortgage Agreement in Principle. If you’ve been doing any research on mortgages prior to receiving First-Time Buyer Mortgage Advice in Manchester, you may have seen this under some different names. These usually include the names ‘Decision in Principle’, ‘Mortgage in Principle’, as well as the abbreviations ‘DIP’ & ‘AIP’. The only difference between them is the name. Other than that, they all do the same thing.
The reason you need a Mortgage Agreement in Principle is to provide a record that you have passed a lenders initial credit scoring system, either via a hard credit search (which leaves a footprint on your credit file) or a soft credit search (which does not leave a footprint on your credit file).
There is still no guarantee you will be accepted on a mortgage, but is a step you must take on your way towards your end goal. Another benefit to you having this document, is that it will show the seller of a property that you are very serious, possibly creating room for price negotiations with them when it comes to making an offer.
A typical AIP will usually last anywhere between 30-90 days, and once it has expired, can be easily renewed. Our team can usually get one of these turned around for you within 24 hours of your initial consultation with an advisor.
After you have obtained your Agreement in Principle, you will need to find yourself a Conveyancer to help you with the legal proceedings of the homebuying process. The term Conveyancing is given name for the transfer of legal ownership of property between parties, whether you’re the buyer or seller.
Your Conveyancing Solicitor will be able to handle contracts, give any necessary legal advice, conduct local council/authority searches, help sort out Land Registry and lastly transfer the funds you have acquired in order to pay for the property you wish to purchase. As is surely clear from the tasks involved here, this is a vital role in your process, so you must make sure you carefully make your choice.
Another point that should be made here, is that Licensed Conveyancers are property specialists and can’t deal with complicated legal issues, whereas more general Solicitors offer a full range of services so can often seem more costly. Whilst we do not offer these services ourselves in-house, we have a list of trusted companies that we will gladly be able to refer you out to, should you ask for this.
You’ve now spoken to a fast & friendly Mortgage Broker in Manchester, passed the Mortgage Affordability Assessment, obtained an Agreement in Principle and found yourself a Conveyancing Solicitor to help process the legal side of your home buying journey. This means you’re halfway there! Your next step is to make an offer on a property!
As touched upon previously, with an Agreement in Principle in hand, you will be in a much better place to negotiate with the seller regarding price. Make sure not to “low-ball” the seller with an insulting offer, but don’t be afraid to ask for a lower price. Knowing you have an AIP with you, the seller will be more likely to accept your offer than someone who is willing to pay the asking price but hasn’t even begun to prepare themself.
The worst thing that can happen is if the seller says no, but it’s at that point you can work out a more reasonable offer for both of you or walk away and find yourself another property with a better suited price. Once you’ve had an offer accepted, it’s back to your mortgage advisor and onto the last leg of your mortgage journey.
Onto an important step, in submitting the required documents to proceed with your mortgage. As you might have expected when such a large amount of money is involved, a mortgage lender will not just lend to anyone who asks for a mortgage. They’ve done this in the past and things didn’t work out too well.
The mortgage lender will need you to provide various documentation to prove that you are the right person, the amount you earn from your current career, where your current residence is and how well you conduct your finances monthly. If you’re obtaining a joint mortgage, they will require this same documentation from each parties involved.
The types of documents you will need to submit, include; proof of identification, proof of address, the last 3 months’ of your pay slips and latest P60 (employed), the last 3 years’ proof of earnings and Tax Year Overviews (self-employed in Manchester), proof of any income such as state benefits or maintenance, proof of deposit and the last 90 days of your personal bank statements.
With your mortgage agreed in principle, and having an offer accepted, we can now proceed to submit your full mortgage application. With everything prepared and checked by your hard working Mortgage Advisor in Manchester & their team of Mortgage Administrators, we are ready to submit an application to the lender in hopes of getting you a mortgage.
Your advisor will send off all the collected evidential documentation for this, and then all that is left is to wait for them to respond with either an accepted application or a declined one. Whilst there is no given time frame, our Mortgage Administration team will be able to chase the lender for an answer on this for you, until it has been made clear.
In-between your mortgage application and being offered a mortgage, the lender will require that your property have a valuation survey taken out on this. These are usually carried out by accredited companies nominated by the lender (someone whom the lender will trust).
The reason they do this is to understand the true value of the property, versus what you’ve agreed to pay for it with the seller. If you’re paying above its actual market value, the lender may be less willing to accept your offer. This is because they will most likely be out of pocket and unable to make back the full borrowed amount, if you happen to fall into arrears at any point. This is usually referred to as a ‘Down Valuation’.
There are various types available when it comes to surveys, with variances in the prices of each of these. Some will just want to check how much the property is worth, whereas some will also provide information on any structural concerns, as well as possible repairs that you may need to lookout for in the future. Your Mortgage Advisor in Manchester will be able to help you out, choosing the right survey for you.
Now it is time for the moment you’ve been waiting for since Step One. Your lender has checked over your case and performed an assessment of all the evidencing documentation. Once this is done, they will present you with your Mortgage Offer.
Our team of friendly Mortgage Advisors and Administrators in Manchester, that you’ve no doubt become friendly with over the course of your process, will check over the offer on your behalf to ensure everything is correct and right for you. Then after your mortgage offer has been received, it’s down to your Conveyancing Solicitor to take your purchase from that point, through to completion.
Congratulations, you’ve now officially gone from First-Time Buyer in Manchester to a full fledged First-Time Homeowner in Manchester. With any prior stress and anxieties now firmly behind you, we hope you’re happy and ready to begin your new life, in your new home.
All you need to do is go get your keys and begin the process of moving in! We hope you received a fast & friendly Mortgage Advice service in Manchester and enjoyed speaking to our team along the way. If you have chosen a fixed rate mortgage, at the end of your term, we will Get in Touch again to help out with your Remortgage!